Lai v. Wang CASE NO. 17CV308093
DATE: 28 January 2020 TIME: 9:00 AM LINE NUMBER: 6
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 20 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 20 at 408.808.6856 and the opposing party no later than 4:00 PM on Monday, 27 January 2020. Please specify the issue to be contested when calling the Court and Counsel.

PLAINTIFF’S MOTION TO LIFT STAY AND TO APPOINT A FORENSIC EXPERT

I. Factual and Procedural Background

In or about June 2016, defendant Wen Fang Wang (“Wang”) approached plaintiff X. Young Lai (“Lai”) for legal representation in her divorce case. (First Amended Complaint (“FAC”), ¶8.) With respect to her financial condition, defendant Wang represented to plaintiff Lai that (1) she received no distribution of assets before separation; (2) she has no funds to retain an attorney for her divorce; (3) she was in arrears of her rent and had insufficient funds to buy food. (FAC, ¶9.) Defendant Wang knew these representations to be false when made and the representations were intended to induce plaintiff Lai to perform legal services for defendant Wang at no cost. (FAC, ¶10.)

In reliance on the representations, plaintiff Lai entered into a retainer agreement with defendant Wang whereby plaintiff Lai would request an order for attorney’s fees in defendant Wang’s divorce case claiming financial hardship. (FAC, ¶12.) In further reliance, plaintiff Lai advanced legal fees on defendant Wang’s behalf and performed substantial services for defendant Wang without receiving adequate compensation. (FAC, ¶13.)

The retainer agreement states, in pertinent part, “If we elect to terminate our representation … In such case, you agree to pay for all legal services performed and expenses incurred before the termination of representation in accordance with the provision of this agreement.” (FAC, ¶18.) After plaintiff Lai terminated the retainer agreement in late January 2017, defendant Wang became liable for attorney’s fees and costs in the amount of $25,776.43 but breached the agreement by failing or refusing to pay. (FAC, ¶¶19 – 20.)

Defendant Michelle Ann Melen (“Melen”) substituted plaintiff Lai as defendant Wang’s counsel in the divorce case in February 2017. (FAC, ¶25.) Plaintiff Lai originally commenced the instant action against defendant Wang in April 2017. (FAC, ¶26.) In May 2017, defendant Wang filed a malicious and false State Bar complaint against plaintiff Lai. (FAC, ¶26.) Wang evaded service of the instant action until October 2017. (FAC, ¶27.) Defendant Melen knowingly gave substantial assistance to defendant Wang in evading process and instituting a false State Bar complaint. (FAC, ¶30.)

Defendant Melen filed a petition for non-binding fee arbitration. (FAC, ¶28.) To circumvent the statute of limitations, defendant Wang made a false declaration that she never received notice of the right to arbitrate even though she received such notice nine months ago. (FAC, ¶29.) On November 21, 2017, defendant Melen filed a stay of the instant action. (FAC, ¶31.)

On December 5, 2017, in support of defendant Wang’s request for attorney’s fees in the divorce action, defendants Wang and Melen presented declarations in the divorce action that plaintiff Lai was owed attorney’s fees and costs in the amount of $25,776.43. (FAC, ¶31.) Defendants Wang and Melen intentionally concealed from the family court the fact that defendant Wang was disputing plaintiff Lai’s fees and had filed a petition for fee arbitration. (FAC, ¶32.)

In March 2018, defendant Frank Scott Moore (“Moore”) substituted defendant Melen as defendant Wang’s counsel in the fee arbitration. (FAC, ¶34.) Defendant Moore presented a claim of legal malpractice which was outside the scope of the fee arbitration. (FAC, ¶36.) Defendant Moore knowingly misrepresented the transcript of the family court hearing and intentionally presented a falsified document manufactured by defendant Wang to the panel or arbitrators. (FAC, ¶37.) Defendants Moore and Melen intentionally concealed the falsity of the document by carefully redacting exhibits which would have exposed the falsity and made false statements to make the document more deceptive. (FAC, ¶38.) Rather than rectify the fraud, defendants dismissed the fee arbitration in October 2018. (FAC, ¶39.) The forged document and intentional misrepresentations were not designed to settle a fee dispute but to delay resolution of the instant action, to burden plaintiff Lai financially, to harass plaintiff Lai, and to pressure plaintiff Lai to give up valid claims. (FAC, ¶43.)

On April 3, 2017, plaintiff Lai filed a complaint against defendant Wang. As noted above, defendant Wang filed a notice of stay based on the fee arbitration. At an October 25, 2018 case status review, counsel informed the court that the matter would not proceed to arbitration and the court lifted the stay.

On December 3, 2018, defendant Wang filed a demurrer/ motion to strike plaintiff Lai’s complaint.

On January 14, 2019, plaintiff Lai filed the operative FAC and a Doe amendment substituting defendants Melen and Moore for Doe defendants. The FAC asserts causes of action for:

(1) Fraud
(2)
(3) Breach of Contract
(4)
(5) Common Counts
(6)
(7) Malicious Prosecution
(8)
(9) Abuse of Process
(10)
(11) Conspiracy
(12)

On January 25, 2019, defendants Moore and Melen filed (1) a special motion to strike the FAC; and (2) a demurrer/ motion to strike the FAC.

Also on January 25, 2019, defendant Wang filed (1) a special motion to strike the FAC; and (2) a demurrer/ motion to strike the FAC.

On May 10, 2019, the court issued an order granting defendants Moore and Melen’s special motion to strike, deeming defendants Moore and Melen’s demurrer/motion to strike moot. The court denied defendant Wang’s special motion to strike with regard to the first through third causes of action, but granted defendant Wang’s special motion to strike the fourth through sixth causes of action. With regard to defendant Wang’s demurrer, the court overruled the demurrer to the first cause of action and sustained the demurrer to the second and third causes of action with leave to amend. The court deemed defendant Wang’s motion to strike to be moot.

On May 24, 2019, Wang filed a cross-complaint against Lai. The cross-complaint alleges Wang came to the United States through her husband sponsor. (Cross-Complaint, ¶10.) Wang was in the marriage for 13 years and her husband controlled all of the family finances. (Cross-Complaint, ¶11.) In 2005, during the marriage, Wang’s mother loaned Wang and her husband more than $89,000 to pay for the down payment on their house. (Cross-Complaint, ¶12.) Wang’s brother sent more than $120,000 to Wang’s husband to invest for his children’s college fund. (Cross-Complaint, ¶13.)

On July 13, 2015, Wang’s husband wired $89,290 to the couple’s account which was money to repay Wang’s mother. (Cross-Complaint, ¶15.) On September 9, 2016, Wang sent $89,085 to pay back her mother for the money she lent Wang and her husband. (Id.) Wang’s husband also provided $120,000 to Wang to repay Wang’s brother. (Id.) Wang held onto this amount while continuing to press her husband to pay back more than just the principal amount. (Id.)

When facing divorce, Wang found Lai in a Chinese-language yellow pages listing in June 2016. (Cross-Complaint, ¶16.) In a proposed retainer agreement, Lai represented to Wang that she would not have to pay him and that Lai would seek court-awarded fees to be collected from her husband. (Id.)

During his representation of Wang, Lai did not keep her informed about a plan for representing her. (Cross-Complaint, ¶19.) Early in the representation, Wang informed Lai (including providing documentation) about the facts surrounding the money received from Wang’s mother and brother and details of the money Wang’s husband gave her to repay Wang’s mother and brother. (Cross-Complaint, ¶20.)

Lai did not prepare Wang for any of the court hearings in the family law case. (Cross-Complaint, ¶¶26 and 28.) When the court questioned Lai about the financial transactions above during a hearing on January 25, 2017, Lai was unprepared to respond. (Cross-Complaint, ¶¶30 and 34.)

Lai terminated his representation of Wang after the January 25, 2017 hearing. (Cross-Complaint, ¶37.) Lai never inquired of Wang about the financial transactions at issue and accused Wang of lying about the transactions. (Cross-Complaint, ¶38.)

Wang’s cross-complaint against Lai asserts causes of action for:

(1) Professional Negligence
(2)
(3) Breach of Fiduciary Duty and Duty of Loyalty
(4)
(5) Declaratory Relief
(6)
(7) Unfair Competition in Violation of Business & Professions Code §17200
(8)

On May 28, 2019, Lai filed a Notice of Appeal of the court’s May 10, 2019 order and a Notice of Stay of Proceedings.

Also on May 28, 2019, Lai filed a second amended complaint (“SAC”) which is directed at Wang only and asserts causes of action for:

(1) Fraud
(2)
(3) Breach of Contract
(4)
(5) Common Counts
(6)

On June 26, 2019, Wang filed a Notice of Cross-Appeal of the court’s May 10, 2019 order.

On June 28, 2019, Lai filed the motion now before the court, a demurrer and motion to strike Wang’s cross-complaint.

On July 8, 2019, Wang filed a Notice of Stay of Proceedings. On July 9, 2019, Wang filed a document entitled, “Defendants’ Notice of Filing of Stay of Proceedings on Cross-Appeal Staying All Proceedings Including Demurrer and Motion to Strike Cross-Complaint; Memorandum of Points and Authorities.”

As this Court can best decipher, the stay was granted but it is unclear on which date, if that date has any relevance to the pending matter.

Consequently, Code of Civil Procedure section 916, subdivision (a) operated to stay the trial court proceedings with regard to the third cause of action of Wang’s cross-complaint only. The stay does not apply to any of the other causes of action asserted in Wang’s cross-complaint.

In this current motion, Plaintiff requests this Court to lift the stay of proceedings at least partially to allow forensic examination of the documents in question; to appoint an expert to examine the documents in question; and to order Defendants to turn over the original documents in question to the examining expert, within 10 days.

Plaintiff claims that this Court should lift the stay and appoint a forensic expert to examine the documents in question since evidence shows, apparently, that the documents have been forged. The forensic examination is capable of determining the age of the handwritten notes. Because the deadline for forensic examination is fast approaching, the Court should lift the stay to prevent irreparable harm.

Defendants claim that while the appeal described above was underway, Plaintiff filed on 11 October 2019 a motion for lifting the automatic stay and to appoint a forensic expert to examine handwriting purportedly to date some handwritten entries on documents that Defendant Wang never used or relied upon in her cross-complaint and which has no bearing on the claims in her cross-complaint.

Defendants further claimed that on 5 November 2019, Judge Kirwan summarily denied LAI’ s motion t0 lift the stay and to appoint a forensic expert.

This current motion was filed by ex parte application on January 3, 2020. Defendants claim that this court lacks jurisdiction to hear the motion.

II. ANALYSIS.

A. This Court Lacks Jurisdiction Over These Motions pursuant to Code of Civil Procedure, § 1008.

This section governs applications for reconsideration and renewed applications. Subdivision (b) provides that a party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made and what new or different facts, circumstances, or law are claimed to be shown.

For a failure to comply with the subdivision, any order made on a subsequent application may be revoked or set aside on ex parte application. (Curtin v. Koskey (1991) 231 Ca1.App.3d 873, 878.) “Section 1008’s purpose is “to conserve judicial resources by constraining litigants who would endlessly bring the same motions over and over, or move for reconsideration of every adverse order and then appeal the denial of the motion to reconsider. (Even Zohar Construction & Remodeling, Inc.v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 839-840.)

“To deter parties from filing noncompliant renewed applications, the Legislature provided that violations of this section may be punished as a contempt and with sanctions as allowed by Code of Civil Procedure, §§ 128.7 and 1008, subd. (d). The only exception to Code of Civil Procedure, § 1008’s jurisdictional bar is a court’s ability to reconsider its previous interim orders on its own motion. (Le François v. Goel (2005) 35 Cal.4th 1094, 1096-1097.)

As best this Court can tell, on 5 November 2019 Judge Kirwan denied the prior motion in its entirety and without reserving anyone the right to file a subsequent motion.

III. Order

Plaintiff’s motion to lift stay and to appoint a forensic expert is DENIED.

_______________¬¬¬____________

DATED: ______________________¬¬¬________________________

HON. SOCRATES PETER MANOUKIAN

Judge of the Superior Court

County of Santa Clara

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